TechFlow news — On December 18, according to Bloomberg, Deutsche Bank, Germany's largest bank, is developing an Ethereum Layer 2 blockchain based on ZKsync technology. The initiative aims to address compliance challenges financial institutions face when using public blockchains, particularly the risk of unintended transactions with sanctioned entities.
The bank’s L2 solution, named Project Dama 2, will integrate directly with the Ethereum mainnet. The design introduces a trusted validator mechanism and grants special supervisory permissions to regulators, mitigating risks associated with interactions involving sanctioned entities while balancing blockchain transparency against financial compliance requirements. Deutsche Bank plans to launch a minimum viable product (MVP) in 2025 and is currently awaiting regulatory approval.
This project forms a key part of the Monetary Authority of Singapore’s Project Guardian initiative. Project Guardian now includes 24 financial institutions, including Deutsche Bank, collaborating to explore blockchain-based asset tokenization.
